Enbridge delays project work in Canada for Cabin gas processing plant

Enbridge said Monday it has agreed with the other owners of the Cabin Gas Plant development in British Columbia to defer commissioning of Phase 1 of the project and construction of Phase 2.

The Calgary pipeline company owns a 71% stake in the natural-gas processing facility, including a 52% stake it purchased from Encana late last year for about 220 million Canadian dollars ($222 million).

The Cabin plant had regulatory approvals for processing capacity of about 800 million cubic feet/day of natural gas, and Phase 1 was expected to be in service late this year. Phase 2 was expected to be ready for service in the third quarter 2014.

Enbridge, which didn't say why the development was deferred, had said it expected to invest about C$1.1 billion by the completion of both phases of Cabin.

A North American-wide gas glut has depressed prices to the lowest level in a decade.

Separately, Enbridge said it has entered a midstream services deal with Encana to develop gas gathering and compression facilities in the Peace River Arch area of northwestern Alberta.

Enbridge said it has agreed to acquire from Encana certain gathering and compression facilities in the area that are currently in service and under construction.

Specific financial terms of the deal weren't disclosed, but Enbridge said the midstream services agreement will parallel previously established terms between the two companies reached in 2011.